On March 31, 2023, Capital Investment Advisers paid $4,570,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of $1,074.790. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $607.490. Without considering the buildings or improvements, the tract of land was estimated to have a value of $2,990,720. Capital incurred the following additional costs: Cost to demolish Building 1 Cost of additional landscaping Cost to construct new building (Building 3) Cost of new land improvements near Building 2 (Land Improvements 2) Required: 1. Allocate the costs incurred by Capital to the appropriate columns and total each column. Purchase price Demolition Land Building 2 Building 3 $703,160 272,020 2,476,000 254,600 Land Land Improvements 1 Improvements 2

On March 31, 2023, Capital Investment Advisers paid $4,570,000 for land with two buildings on it. The plan was to demolish Building 1 and build a new store (Building 3) in its place. Building 2 was to be used as a company office and was appraised at a value of $1,074.790. A lighted parking lot near Building 2 had improvements (Land Improvements 1) valued at $607.490. Without considering the buildings or improvements, the tract of land was estimated to have a value of $2,990,720. Capital incurred the following additional costs: Cost to demolish Building 1 Cost of additional landscaping Cost to construct new building (Building 3) Cost of new land improvements near Building 2 (Land Improvements 2) Required: 1. Allocate the costs incurred by Capital to the appropriate columns and total each column. Purchase price Demolition Land Building 2 Building 3 $703,160 272,020 2,476,000 254,600 Land Land Improvements 1 Improvements 2

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.